State Street Global Advisors is on the prowl for a new chief. Bill Hunt has stepped down from his post amid the fallout from the subprime crisis. James Phalen, State Street's executive vice president and head of international operations for investment servicing and investment research and trading, is returning to SSgA to serve as interim president and CEO.

William Hunt SSgA Former president and CEO

News of Hunt's departure comes as State Street Corp. officials said they are earmarking $618 million to cover legal and other costs tied to "the underperformance of certain fixed-income strategies managed by SSgA." State Street will book a net charge of $279 million to cover the establishment of the reserve.

Ron Logue State Street CEO

“We have reviewed the actively managed fixed-income strategies at SSgA that contained investments backed by sub-prime mortgages. Based on our review and discussions with certain customers who were invested in these strategies, we have established this reserve to address legal exposure and other costs relating to these strategies," said State Street Corp. CEO Ronald Logue in a news release.

James Phalen SSgA Interim president and CEO

State Street officials said they have launched a global search for Hunt's permanent replacement and will consider both internal and external candidates.

SSgA's fixed income department has been in flux for some time now. In late November of last year, Paul Greff, leader of SSgA's fixed income team left the company. At the same time Michael O'Hara, head of active fixed income and regional CIO for North America, Sean Flannery, departed for other opportunities.  

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